Leucrotta Exploration Inc. Announces Completion of Arrangement and Creation of A Montney-Focused Exploration and Production Company

CALGARY, ALBERTA--(Marketwired - Aug. 6, 2014) -

THIS PRESS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEW SERVICES.

Leucrotta Exploration Ltd. ("Leucrotta") is pleased to announce the successful completion of its previously announced plan of arrangement (the "Arrangement") involving Leucrotta, Long Run Exploration Ltd. ("Long Run") and Crocotta Energy Inc. ("Crocotta") under the provisions of the Business Corporations Act (Alberta).

Pursuant to the Arrangement, Long Run has acquired all of the issued and outstanding common shares of Crocotta ("Crocotta Shares"). Crocotta shareholders received, for each Crocotta Share held, consideration consisting of: (a) 0.415 of a Long Run common share; (b) one common share of Leucrotta; and (c) 0.2 arrangement warrants of Leucrotta, with each arrangement warrant entitling the holder to purchase one Leucrotta common share at a price of $1.70 for a period of 30 days following closing of the Arrangement.

Leucrotta has applied to the Toronto Stock Exchange and the TSX Venture Exchange to list its common shares and arrangement warrants and will update its shareholders as to the listing date in a subsequent press release to be issued in mid-August.

The management team of Leucrotta will be led by Robert Zakresky as President and Chief Executive Officer, Nolan Chicoine as Vice President, Finance and Chief Financial Officer, Terry Trudeau as Vice President, Operations and Chief Operating Officer, Helmut Eckert as Vice President, Land, Richard Sereda as Senior Vice President, Exploration and Peter Cochrane as Vice President, Engineering (the "Management Team"). The Management Team was fundamental to Crocotta's growth since inception by leading Crocotta's efforts in the exploitation and acquisition of its high quality oil and gas assets and will continue to be a key component of Leucrotta's future success. The Board of Directors of Leucrotta consists of Messrs. Robert Zakresky, Donald Cowie, Daryl Gilbert, Brian Krausert, Tom Medvedic and Kelvin Johnston.

Leucrotta will be a growth-oriented, exploration-focused entity with approximately 2,300 BOE/d of liquids-rich natural gas. Leucrotta's assets will be focused in the Montney gas resource trend of northeast British Columbia predominantly in the Dawson-Sunrise area.

As previously announced, Leucrotta completed a bought deal private placement (the "Offering") of subscription receipts (the "Subscription Receipts") of Leucrotta at a price of $1.70 per Subscription Receipt for aggregate gross proceeds of approximately $45.0 million. The gross proceeds from the Offering are being held in escrow and upon all escrow release conditions being met and the required notices being given to the escrow agent, the gross proceeds from the Offering will be released to Leucrotta and the holders of Subscription Receipts will receive, without any additional consideration, one common share of Leucrotta for each Subscription Receipt held. If all of the escrow conditions have not been satisfied on or before 11:59 p.m. (Calgary time) on October 31, 2014, the escrow agent will return to each holder of Subscription Receipts the aggregate offering price of the Subscription Receipts held by that holder plus the pro rata portion of interest earned on the escrowed funds. Leucrotta anticipates meeting all of the escrow release conditions in mid-August.

In addition, as previously announced, Leucrotta proposes to issue up to 7.65 million units of Leucrotta ("Units") to certain officers, employees and directors of Leucrotta (the "Management Private Placement"). Each Unit is comprised of one common share of Leucrotta and one common share purchase warrant of Leucrotta (a "Warrant"). The Units will be priced at $1.70 per Unit with the Warrant exercise price being priced at $2.04. The Warrants will vest equally over 3 years and will have a 5 year term from the date of issuance. Leucrotta anticipates closing of the Management Private Placement to take place on or prior to mid September.

Forward-Looking Information

Certain information contained in this press release constitutes forward-looking information or statement including, without limitation, forward-looking statements as to the listing of the common shares and arrangement warrants of Leucrotta on a Canadian exchange, the timing of escrow conditions in the Subscription Receipt Agreement being met, the timing of the closing of the Management Private Placement, Leucrotta's internal projections, expectations or beliefs relating to future events or future performance, including for Leucrotta, future financing, asset ownership and operating plans. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expects", "projects", "plans", "anticipates" and similar expressions. These statements represent the expectations or beliefs of management of Leucrotta concerning, among other things, future capital expenditures and future operating results and various components thereof or the economic performance of Leucrotta.
The projections, estimates and beliefs contained in such forward-looking statements are based on management's assumptions relating to the production performance of Leucrotta's oil and gas assets, including the assets to be acquired through Leucrotta, the cost and competition for services throughout the oil and gas industry in 2014, the results of exploration and development activities during 2014, the market price for oil and gas, expectations regarding the availability of capital, estimates as to the size of reserves and resources, and the continuation of the current regulatory and tax regime in Canada, and necessarily involve known and unknown risks and uncertainties inherent in exploration and development activities, geological, technical, drilling and processing problems and other risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted. Leucrotta does not assume responsibility for the accuracy and completeness of the forward-looking information or statements and such information and statements should not be taken as guarantees of future outcomes. Subject to applicable securities laws, Leucrotta does not undertakes any obligation to revise these forward-looking information or statements to reflect subsequent events or circumstances. Furthermore, the forward-looking information contained in this press release is made as of the date of this document and Leucrotta does not undertakes any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking information and statements contained in this press release are expressly qualified by this cautionary statement.

Meaning of BOE: When used in this press release, BOE means a barrel of oil equivalent on the basis of 1 BOE to 6 thousand cubic feet of natural gas. BOE per day means a barrel of oil equivalent per day. BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 1 BOE for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This press release is not for dissemination in the United States or to any United States new services. The common shares of Leucrotta have not and will not be registered under the United States Securities Act of 1933, as amended (the U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.